Charging sales tax on full retail value (not discounted subtotal) - developer help wanted

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New Member
2 0 0

My store takes a unique approach to our sales: we offer promo codes that reduce the initial sale price of our products. This is done through Shopify using a discount code, but it is not actually a discount. Our customers still pay full retail price for every sale, but they pay back the "discounted amount" over time using a portion of the points that they earn as members of our service. (Our customers get paid to save energy, and those payments come through a point system that is managed on our site.)

Legally, we are doing a credit sale - asking for part of the payment up front and issuing up to $150 credit that is paid down over time via points. Thus, we need to charge sales tax on the total purchase amount (the full retail price) at the time of the transaction.

However, Shopify's system is (very frustratingly) limited in its capabilities here, and it can only charge sales tax on the subtotal after a discount code is applied. I have spoken to numerous "gurus" from Shopify and they have repeatedly told me that there is simply no way to adjust Shopify's setting to charge sales tax on the pre-discounted amount. I most recently spoke to Amanda who suggested I post in this forum to see if there are any developers out there who might have suggestions of what I can do.

Really appreciate any ideas or suggestions!

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Shopify Staff
Shopify Staff
127 0 9

Hey there,

Justin here - let me try and offer some insight into that for you.

You are correct, the way the taxes are calculated, are from the price the customer pays for the cart.

Currently, there aren't any ways to alter the way the taxes are charged when using discount codes.

I have an article here about how sales tax is calculated for Shopify, and goes a bit more in-depth into how that is calculated and why.

The best I could suggest for you would be to issue a refund for the specified amount of the credit after the sale has been completed, thus having the full sales taxes paid and then the appropriate amount going back to the customer.

Thanks for reaching out! If there are any developers or anything that wanted to lend some insight into possibilities, feel free to post as well!

Justin L

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Tourist
9 0 1

Bummed this isn't supported in Shopify.

I am using Shopify to fulfill orders from my Kickstarter. I'm giving my Kickstarter backers a coupon code for the exact amount they pledged, so when they check out of my Shopify store, the product price is reduced to $0. I'm required to collect sales tax for California orders. There's no easy way to accurately calculate it without an override that calculates tax based on the full price. The best I can do is make special coupons for California customers which already have the tax subtracted. But each city in CA has a different sales tax rate. Plus I need to know they're in CA before I send the coupon codes.

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